Japan bankruptcies fall due to support measures

A credit research firm says the number of corporate bankruptcies in Japan in 2020 fell by more than six percent from the previous year. It says government assistance and other support measures amid the pandemic kept many firms afloat.

Teikoku Databank says 7,809 firms with debts of at least 10-million yen, or around 96,000 dollars, began legal proceedings for liquidation last year.

That's the second lowest figure since 2000 when equivalent records began. Total debts came to around 11 billion dollars, a record low.

However, the researchers warn the decline in bankruptcies could be temporary, due to the financial support provided by interest-free, no-collateral loans, and other measures.

Sectors hard-hit by the pandemic saw the most bankruptcies.

Eateries and drinking establishments suffered their largest-ever total, at 780. The number of failed hotels and inns stood at 127, up around 80 percent from a year earlier.

The researchers warn more businesses could collapse toward the end of this fiscal year through March.

They fear consumption may continue its slump, due largely to the second state of emergency declared by the government.